The U.S.-China trade talks in Geneva, Switzerland, over the weekend have resulted in a win, at least temporarily.
In a joint statement issued this morning, the Governments of the United States of America and the People’s Republic of China agreed to roll back destructive tariff rates for 90 days pending further talks.
Beginning Wednesday, a trio of Executive Orders will be reversed alongside back-and-forth, tit-for-tat tariffs that both sides have stacked against each other in recent months. The crushing 145% U.S. tariff on Chinese goods will effectively drop to 30% while China will reduce its tariff on U.S. goods to just 10%.
While details are not yet set, He Lifeng, Vice Premier of the State Council, will represent China in the ongoing negotiations, while Scott Bessent, Secretary of the Treasury, and Jamieson Greer, Trade Representative, will represent the U.S.
“It’s important to understand how quickly we were able to come to an agreement, which reflects that perhaps the differences were not so large as maybe thought,” said Greer in a statement issued yesterday.
While many in the toy and game industries will no doubt argue that a 30% tariff is still too high in a business that functions on tight margins, any relief is welcome. Production shutdowns and shipping pauses have already created a ripple effect through the supply chain that rivals the pandemic-related shutdowns of 2020.
One concern is that the race to resume production and shipping will result in price gouging by ocean freight carriers, another echo of the pandemic that further eats into margins.
Forecasting remains tricky as the pause kicks in on May 14, and the previously announced 90-day pause on reciprocal tariffs on goods from other countries expires on July 31.
In the meantime, The Toy Book continues supporting the advocacy efforts of The Toy Association, ASTRA, and others in the industry to #KeepToysTariffFree with a “Zero for Zero” trade policy.
